Politics

Obamacare rule delayed: Now what?

On Tuesday, the Obama administration announced a major change to the implementation of its landmark health care law, delaying by a year the requirement that all businesses with more than 50 workers provide health-care coverage or pay fines of $2,000 per employee.

While the administration made the announcement with little fanfare, insisting the rest of the Obamacare rollout would continue unabated, the delay changes the game in a number of ways. Given how interconnected all the elements of the Affordable Care Act are, delaying the employer mandate could have a ripple effect on other parts of the law -- including its price tag. On top of that, the legal underpinnings of the administration's move could have broader consequences for presidential power. Those consequences, meanwhile, will certainly change the political dynamics surrounding the ongoing debate over health care.

Here's a look at three key questions about the impact of the employer mandate delay:

How will this affect the rest of the Obamacare rollout?

It's worth noting that some significant parts of the Affordable Care Act are already in effect. Currently, the law stops insurance companies from denying coverage for children with pre-existing conditions, and it eases prescription drug costs for seniors. Insurers are now required to spend at least 80 percent of premiums on actual health care, rather than overhead expenses. Children under 26 years old are now able to stay on their parents' insurance plans, enabling 3.1 million more young adults get health insurance.

Most of the key pieces of the law, however, were slated to go into effect at the same time as the employer mandate. That includes the individual mandate -- the requirement for all Americans to acquire health insurance. It also includes the implementation of the health care exchanges -- state-based, online marketplaces where individuals and small businesses can comparison shop for health insurance. Open enrollment for the exchanges is slated to start in October of this year, three months before they are up and running. In a White House blog post, White House senior adviser Valerie Jarrett wrote, "We are full steam ahead for the Marketplaces opening on October 1."

Still, the many different parts of the Affordable Care Act were designed to work in concert with one another -- and delaying the employer mandate could impact which Americans are exempt from the individual mandate, or who gets subsidies to purchase insurance on the exchanges.

Tim Jost, a professor of health law at Washington and Lee University, noted in a blog post Tuesday that consumers will be eligible for subsidies based on the level of health coverage their employer offers them (if any). However, Jost wrote, "If employers have no obligation to report coverage, how will the exchanges or the IRS verify claims that coverage is unaffordable or inadequate?"

Even if consumers can report that information themselves on their tax returns, Jost continued, "Will the lack of an employer mandate mean that many more individuals will become eligible for premium tax credits, either because their employers drop or do not expand coverage, or fail to respond to requests to verify coverage?"

In other words, delaying the employer mandate could throw off projections regarding how people get health insurance in the next year, and as well as projections of Obamacare's cost.

Jost, along with the conservative think tank the Heritage Foundation, note that the nonpartisan Congressional Budget Office estimated that the employer mandate would bring in $10 billion in the first year alone from the penalties imposed on businesses who failed to provide coverage. That's $10 billion less in revenues from a policy that's already having funding issues.

While some supporters of the health care law -- like House Minority Leader Nancy Pelosi, D-Calif. -- have tried to put a positive spin on the delay, others are expressing concern about it.

"The employer responsibility provision included in the Affordable Care Act (ACA), while not as strong as we asked for, was designed to give large employers an incentive to offer or continue offering affordable, comprehensive health care coverage to some of their employees," AFL-CIO President Richard Trumka said in a statement. "The Administration's announcement that it is delaying employer responsibility assessments until 2015 is troubling because it removes that incentive for next year. In light of this decision, we believe it is even more urgent for Congress and the Administration to reaffirm their commitment to employer responsibility."